Tea and tax scrutiny are problems for IRS

Few government agencies hold such broad authority as the Internal Revenue Service, so when the IRS starts targeting groups for their political viewpoints it is a threat to free speech and our political system.

Such abuse of a federal agency’s power to focus and even harass those with contrary political views smacks of the petty despots of Third World nations. It’s good to see a number of leading Democrats, including President Barack Obama, are condemning the IRS actions.

It was conservative groups in the bull’s eye this time, but it could easily be liberal or moderate groups if more safeguards aren’t put in place. Action must be taken to ensure similar inappropriate political attacks don’t occur in the future.

Last week, an IRS official admitted that some employees in the tax agency targeted for special scrutiny groups with the words “Tea Party” or “Patriot” in their names. Lois Lerner of the IRS apologized for the action, but said there was no political intent behind the effort. Agents in the Cincinnati office of the IRS were simply trying to use shortcuts to examine a flood of new tax-exempt groups, she said.

But the words were barely out of Lerner’s mouth before her story started to crumble.

The agency targeted far more than tea party groups, according to an audit by the Inspector General for the IRS. Conservative groups that were critical of the government or sought to educate Americans about the Constitution and the Bill of Rights were also put under the agency’s microscope. In some cases, the agency demanded excessive information such as clippings of all news stories about a group.

Furthermore, Lerner’s attempt to place all the blame on mid-level IRS executives in Cincinnati doesn’t hold up. The inspector general’s report says that top officials with the IRS knew of the focus on conservative groups as early as 2011, even though the former IRS Commissioner Douglas Shulman — a Bush appointee — told Congress in March 2012 that his agency was not targeting conservative organizations.

One GOP congressman Monday proposed a bill that would punish IRS agents with prison time if they use their authority to target groups for polictial reasons. It’s too early to endorse such legislation since the details aren’t known, but there should be serious consequences for this kind of abuse.

The revelations about the IRS are an embarrassment for the Obama administration, which is also trying to tamp down a growing scandal over its handling of last year’s attacks on the U.S. consulate in Benghazi, Libya.

Obama, who on Monday described the IRS actions as “outrageous,” should get in front of this issue by pledging to work with Congress, not only to find out exactly how this occurred, but also to formulate new rules to prevent any future IRS scrutiny based on political views.


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While I agree that groups should not be targeted by the IRS for their political leanings, whether they are leaning to the left or the right, I think there is an issue that is being missed in all of this outrage. When did America decide to forgo taxes on political groups? The 501(c)(4) status is for a group that primarily promotes the social welfare of the nation. How do ads bashing political enemies promote the social welfare of a nation? Political donations to candidates are not tax deductible for individuals, why is it okay for them to be tax deductible for individual and corporate donors to 501(c)(4) organizations—whether it is Obama’s Organizing for Action or Rove’s American Crossroads? The IRS needs to target all of the organizations that are confusing social welfare with political expediency.

Kudos to the Daily Sentinel for Monday’s coverage of the IRS “scandal”:  “Ground zero of scandal:  IRS unit in turmoil” (NYT), “Aide:  Obama didn’t know of targeting” (AP), and “Audit flap energizes tea party coalition” (AP).

Contrary to Senator Rubio’s contention that “this is what happens when you expand government”, the reported facts demonstrate that the “scandal” arose from mindlessly shrinking government, changing “the rules of the game” without providing adequate guidance, and then inundating IRS employees with thousands of dubious applications.

Under Section 501(c)(4) of the tax code, only “social welfare” entities not “primarily” engaged in politics are entitled to tax-exempt status – under which taxpayers effectively subsidize their activities and their tax-deducting contributors can remain anonymous.

Political groups of every persuasion sought to exploit the loophole opened by the Citizens United decision by claiming to be primarily “social welfare” organizations entitled to conceal the identities of – particularly—their wealthy and corporate donors.

Despite the contents of their applications, many such groups appeared to be ineligible for tax-exempt status.  For example, “Tea Party” and other “conservative” groups using patriotic-sounding euphemisms in their organizational names had publicly vilified both government in general and President Obama in particular, suggesting that they were not “primarily” engaged in promoting “social welfare”, but rather partisan political views.  Nevertheless, only some 70 of 300 groups purportedly “targeted” were “conservative”.

Unfortunately, that “targeting” took the form of intolerable delays and IRS requests for additional information which were not narrowly tailored to the law’s eligibility criteria – evidence of mismanagement that justified the resignations of incompetent bureaucrats.

Thus, the real “scandal” is that the Tea Party, et al., having been caught with their hands in the public “cookie jar”, are “outraged” at being “singled out”—not because they are “conservative”, but because they are self-evidently and primarily political.

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